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TORONTO — A landmark agreement to reduce greenhouse gas emissions by more than 17 percent over the next five years was formally signed Tuesday by the Canadian government and the country's automobile industry.

In keeping with the Kyoto protocol on climate change, the pact could reduce annual gas emissions for Canadian vehicles by 5.3 million tons by 2010, if the voluntary program is carried out properly after it goes into effect in 2007.

"This is a good deal for the economy, the environment and consumers," said Natural Resources Minister John Efford. "Ultimately, it's a deal that all Canadians will benefit from as the new technologies needed to reach this target come on the market."

Other signatories were Ford of Canada CEO Joe Hinrichs, chairman of the Canadian Vehicle Manufacturers' Association, and Mercedes-Benz Canada CEO Marcus Breitschwerdt, chairman of the Association of International Automobile Manufacturers of Canada.

"Canada's automobile industry has a long history of introducing new technologies that make the vehicles we produce more environmentally friendly and safer," said Hinrichs.

"This agreement is a breakthrough because it will both cut global warming emissions in Canada and set the stage for similar reductions in the United States," said Dan Becker, director of the Sierra Club's global warming program.

California last year adopted the world's toughest vehicle-emissions standards, designed to cut exhaust emissions in cars and light trucks by 25 percent by 2016. The Alliance of Automobile Manufacturers, however, has filed a federal lawsuit, claiming the regulations are too rigid.

Seven other states have taken steps to emulate California's regulations: New York, New Jersey, Connecticut, Massachusetts, Maine, Vermont and Rhode Island.

"The automakers will find it financially impossible to make one clean set of cars for eight states and Canada and a dirty set for the rest," Becker said. "Eight plus one equals 50."

In Canada, automakers directly employ about 60,000 Canadians and are a key engine of the economy, especially in Ontario. The industry accounts for 12 percent of Canada's manufacturing gross domestic product.

To achieve the regulations, the Canadian automobile industry will promote a variety of fuel-saving and emerging technologies, Natural Resources Canada said in a statement. The industry will also encourage the use of alternative fuels such as ethanol, clean diesel and bio diesel.